Amidst the whirlwind of market euphoria, investors are wise to peek beneath the hood. A formidable $4.4 billion has seeped out of technology-based securities, marking the industry’s most massive exodus yet. On the flip side, a noteworthy $13.3 billion has found solace in investment-grade bonds – a colossal inflow unmatched since September 2020. This exodus and influx aren’t calamitous signs but whispers of prudence in the changing winds. The prudent are diversifying, hinting at a sanctuary in defensive stocks.
Defensive stocks beat to the rhythm of economic tempests. While a market typhoon could cast a pervasive shadow, certain companies are built from sturdier stuff. Their revenue streams stand resilient and true amidst the market’s choppy waters.
No clarion call sounds for a wholesale exodus from your portfolio. A strategic infusion of these defensive stocks could be the subtle armor your holdings crave.
Waste Connections (WCN)
When it comes to defensive fortitude, Waste Connections (NYSE:WCN) stands tall. This company specializes in non-hazardous waste collection, disposal, and resource recovery across the U.S. and Canada. Catering to residential, commercial, and industrial clients, Waste Connection’s services extend to those entrenched in energy and commodity operations.
Resilience epitomizes companies like Waste Connections. While not flashing dazzling financial theatrics, it stays consistent with its earnings performance. This stalwart has trumped earnings estimates since at least the advent of 2023. On average, its outperformance stands at 1.88%.
For 2024, analysts forecast revenues of $8.78 billion, a stellar 9.4% uptick from last year’s $8.02 billion. Fast forward to 2025, and the crystal ball shows $9.38 billion in sales – a promising 6.9% year-over-year incline.
Analysts’ crystal ball also reveals a consensus strong buy rating with a $177.45 price tag. With a high target of $195, Waste Connections secures its spot among the defense elite.
Welltower (WELL)
Firmly ensconced in the league of defensive darlings, Welltower (NYSE:WELL) is a real-estate investment trust (REIT) with a compelling twist. They partner with senior housing operators, post-acute providers, and health systems to underwrite the real estate and infrastructure needed to scale revolutionary care delivery models.
The ebb and flow of retirement-minded baby boomers ensure Welltower’s relevance. Granted, its journey is trickier than most. Q4’s EPS of 15 cents fell well short of the anticipated 26 cents. A similar saga unfolded in Q1. Nonetheless, Q2 and Q3 redeemed the narrative with an impressive 26% average earnings surprise.
For the ongoing fiscal term, experts envision EPS at $1.26, tangoing with $7.42 billion in revenue. This marks a leap from last year’s 66 cents EPS and an 11.7% climb in revenue.
The wise nod toward WELL with a moderate buy rating and a target price of $99.21. Additionally, Welltower gardens a 2.67% forward dividend yield.
Walmart (WMT)
The colossus that is Walmart (NYSE:WMT) speaks for itself. Operating retail behemoths, supermarkets, and online empires, Walmart’s ubiquitous presence needs no grand welcome.
Stalwart Choices for Defensive Investments in 2025
As the financial landscape fluctuates like a teetering seesaw, investors searching for stability often find solace in the well-trodden path of defensive stocks. With their steadfast nature akin to a seasoned warhorse, these stocks – Walmart, Ross Stores, Kenvue, and Realty Income – beckon like a symbolic lighthouse offering sanctuary amidst market storms.
Walmart’s Financial Fortitude
Walmart stands as a beacon of consistency in the tumultuous world of retail. The retail giant’s recent quarterly performance boasted an earnings per share (EPS) that topped expectations, displaying a trend of surpassing estimates. With an average positive earnings surprise hovering around 7%, Walmart is projected to hit an EPS of $2.35 for this fiscal year – a testament to its unwavering presence in the market.
Ross Stores: The Unlikely Shield
Underestimating Ross Stores could be a grave mistake in the realm of defensive investing. While it may seem out of place compared to traditional retail giants, Ross’ specialty in discounted brand-name products positions it as a hidden gem. The company continues to outpace profitability forecasts, with experts anticipating an EPS of $5.93 for the current fiscal year, a promising sign for investors seeking resilience in uncertain times.
Kenvue’s Healthcare Haven
Emerging from the shadows of Johnson & Johnson, Kenvue’s focus on consumer healthcare products provides a steady stream of revenue regardless of economic fluctuations. With ownership of well-established brands like Tylenol and Motrin, Kenvue exudes a sense of comfort akin to a warm blanket on a cool night. Analysts foresee steady growth, projecting a revenue increase to $16.22 billion by 2025.
Realty Income: The REIT Rampart
For those seeking shelter in real estate, Realty Income presents a sturdy fortress. As a dividend aristocrat with a track record of increasing payouts for over 25 years, the REIT offers investors a reliable income source akin to a trickling stream winding through a verdant meadow. With properties spanning the U.S., Spain, and the U.K., Realty Income stands tall as a prime choice for defensive investment strategies.
Fortifying Financial Fortunes: A Closer Look at Real Estate Income Trusts
Real Estate Income Trusts (REITs) are offering investors a unique opportunity amidst market volatility. Realty Income (O), with a forward yield of 5.91%, stands out among its peers as a beacon of stability in uncertain times. Despite some bumps in its earnings performance, experts predict a positive turnaround in the coming fiscal year with an anticipated rise in earnings per share (EPS) to $1.41 and revenue hitting $5 billion.
Solid Ground Amidst Stormy Markets
Realty Income may not be flawless, but its resilience shines through, making it an appealing defensive stock option. Analysts give it a moderate buy rating with a price target of $60.38, signaling a possible upswing that could see the stock hit $66 in the near future.
The Steady Ship of Sempra Energy
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Sempra Energy (SRE) navigates the financial waters like a seasoned captain, benefiting from a natural monopoly in the utility sector. Situated in Southern California, it enjoys a reliable consumer base with above-average income levels, providing a sturdy foundation for its operations.
While not the flashiest stock, Sempra’s steadfastness is commendable. Consistently surpassing per-share profitability estimates, the company boasts an average positive earnings surprise of 5.1% over the past four quarters. Projections for the current fiscal year indicate an EPS of $4.81 and revenue of $16.89 billion, painting a picture of steady growth in line with last year’s performance.
Analysts are bullish on SRE, rating it a consensus strong buy with an average price target of $82.61. When paired with a forward dividend yield of 3.54%, Sempra Energy emerges as a top contender among defensive stock options for savvy investors looking to weather market storms.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
